Contract Transparency

“It is contracts and licenses that determine whether we are benefiting from our natural resources. It is essential that they are arrived at in accordance with the rules and laws of our countries, and in a transparent way. We need fight for this!” Ali Idrissa, Niger

Contracts signed between governments and extractive companies determine how much a resource is sold for and how it will be extracted. In other words, the contract process represents a crossroads where decisions have a far-reaching, and long-lasting, effect.

When contracts and deals around extractive projects are secret, countries miss out on their opportunity for natural resources to contribute to development. Between 2010 and 2012 DRC’s government secretly sold off mining concessions for well under their market value, and citizens lost out on $1.36 billion that could have gone on health or education. It’s not good for companies either, as contracts negotiated behind closed doors fuel suspicion and rumour and fall prey to manipulation by politicians. Extractive contracts become less stable and more vulnerable to arbitrary renegotiation when they have been surrounded in secrecy.

Whether through amending national laws around natural resource extraction or expanding the remit of EITI, PWYP members campaign for an open and competitive bidding process and for contracts to be made accessible to the public. They seek to diminish the likelihood of a dodgy transaction and ensure that the best deal has been reached. Activists also need to know the terms of agreement so that they can monitor extractive projects and ensure that each party fulfils their end of the bargain.

When contracts are open, activists like Social Justice in Côte d’Ivoire are able to monitor deals to ensure that an oil company’s commitment to build schools and hospitals in the region of Jacqueville are realised.

Contract disclosure is no silver bullet – and no end in and of itself – but it is a key part of the game that needs changing if citizens in resource-rich countries are to have a fighting chance.